Morning Notes – Thursday June 22, 2017

/ June 22, 2017

Directional Bias For The Day:

  • Futures are lower
  • Bouncing off 2428.00, low reached at 5:30 AM, 1:30 PM and 4:00 AM on June 21
  • Odds are for a sideways day; watch for break above 2434.50 or below 2428.00 for change of fortunes
  • Key economic data due:
    • Unemployment Claims (est. 241K) at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong and Tokyo were down; Sydney, Mumbai and Seoul were up
  • European markets are mostly lower – Switzerland is up
  • Dollar index is unchanged; USD/JPY, GBP/USD and EUR/USD are down
  • Commodities are higher
  • 10-yrs yield closed at 2.155% on June 21 up from June 20 close of 2.153%; 30-years closed at 2.724% down from 2.735%

Key Levels:

  • Critical support levels for S&P 500 are 2430.74,2422.88 and 2418.53
  • Critical resistance levels for S&P 500 are 2442.23, 2447.90 and 2453.82
  • Key levels for eMini futures: break above 2434.50, the high of 2:00 AM and break below 2428.00, the low of 5:30 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2433.25 and the index closed at 2435.61 – a spread of about 2.25 points; futures closed at 2433.50 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures price action is to the downside – at 7:45 AM, S&P 500 futures were down by -1.25; Dow by -4.00; and NASDAQ by -1.00

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Side
  • 30-Min: Side

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • Candlestick for the last week, Friday June 16 was an almost doji with small upper and lower shadows
  • Last week’s pivot point 2431.81; R1=2445.09, R2=2457.03; S1=2419.87, S2=2406.87
  • An up week – third in last five weeks; sixth in last ten weeks
  • Broke above a down sloping flag (2378.36) on April 24, which has bullish implications; first target is near 2520.00 and the second target is near 2640.00
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 is achieved; second target is near 2467.50
  • Last swing low, 2322.25, was the low on March 27, 2017
  • Above 39-week SMA, 89-week SMA and 10-week SMA
  • Confirmed uptrend, though pulling back
Daily
  • A red spinning top candle with small body and small upper and lower shadows; break below Wednesday’s low will be bearish
  • Above a horizontal channel – high 2400.58 and low 2322.25 – 100% extension target near 2480.00
  • Above 20-day, 50-day EMA, 100-day and 200-day
  • Confirmed uptrend
2-Hour (e-mini future)
  • Mostly sideways move since 4:00 PM on June 20 in the middle of an emerging broadening pattern after breaking above it on June 19
  • Higher highs and higher lows since 10:00 AM on June 12
  • Below recently falling 20-bar EMA, which is below falling 50-bar EMA
30-Minute (e-mini future)
  • Declining since 3:30 PM on June 19
  • Bouncing off lows of 2428.00 at 5:30 AM; double bottom (or triple bottom); break above 2434.50 will complete the pattern
  • Fallen back into the horizontal channel that it broke above at 10:00 AM on June 19
  • Still above the lows of 10:30 AM on June 16
  • At falling 20-bar EMA, which is below falling 50-bar EMA

Previous Session

Major U.S. indices mostly declined on Wednesday June 21. NASDAQ Composite was the only major index to advance. Dow Jones Industrial Average is making a three candle evening star pattern. A break below Wednesday’s low will be critical.

The worst hit sectors were Energy (-1.6%), Materials (-1.1%), Finance (-0.8%) and Industrials (-0.7%). Three sectors were up – Healthcare (+1.3%), Technology (+0.6%) and Consumer Discretionary (+0.2%).

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